Crowd Funding / Peer-to-Peer Lending
Over the past few years you’ll have no doubt seen the popularity of crowdfunding increase.
An attractive alternative to standard lending, it’s an innovative way of getting a loan for your business without going to a bank.
What is crowdfunding?
Crowdfunding, also known as ‘peer-to peer or peer-to-business loans’, is the practice of funding a project or venture via a loan auction. The most common form of crowdfunding is by raising many small amounts of money from a large number of people, typically via the Internet.
At the heart of this relatively new sector is the notion that everyone gets a better deal. With low-interest rates for savings, and a banking culture that views risk in a different light compared to previous years, it’s hardly surprising savers and borrowers are looking for alternative lending options.
How do I secure crowdfunding?
It’s a simple enough process to secure funding:
- You apply to a peer-to-business lending platform who assess your application and make a decision relatively quickly.
- Based on its financial information, your business is given a risk band. Then a loan request page is automatically posted and promoted to the private lenders registered on the site in question.
- Lenders bid to lend you money. The more bids you get, the lower the rate of interest you pay. You can also encourage your contacts to lend and pay them a return ahead of a bank.
Contact our friendly team of advisers if you’d like more information on making a crowdfunding application.
Who can get crowdfunded?
To get crowdfunded, suitable businesses are:
- Looking for a loan between £25,000-£250,000
- Want finance terms for 6 to 60 months
- Are limited companies, LLPs, PLCs or social enterprises
- Must have been trading for at least two years and have two sets of annual accounts file
- Have a minimum turnover of c.£200k p/a
In addition, we also require sight of management accounts covering 60 days prior to the date of application.
How can I get crowdfunded?
At Coreco Commercial we’ve built up over 20+ years’ of lender relationships and can help you obtain unsecured loans of up to £50k and secured loans of up to £250k. If your crowdfunding application is successful, you can expect to have the funds in your bank account within a month.
Do you have questions about crowdfunding and peer-to-peer lending? Perhaps you’re not sure if it’s right for your business? Our experienced commercial finance department are available to answer any questions you may have. Call us on 020 7220 5100 or use our online contact form today.